I still remember the big plagiarism lecture in high school – this was in the early days of the internet, and our teacher said, “If you take a report off the internet and use someone else’s work as your own, it’s breaking the law! “

When it comes to a school report, it’s pretty obvious when someone is copying you. But in business, that’s not always the case, and even though there’s a lot of copying going on, its legality is up for debate.

Sometimes it’s pretty blatant. But other times, your copycat might just be someone who puts their own spin on your ideas (and maybe even does better). Either way, you need to figure out how to deal with copycats – whether they’re illegally stealing your work or becoming legitimate competitors.

Related: How to Maintain Your First-to-Market Position in a Copycat World

1. Be flattered first – then do a legal checklist

If you see someone copying your business, your first reaction will probably be anger – you spent years working on an idea and now someone just swipes it? That can certainly be frustrating. But really, you should be flattered. Think about it: “Wow, does anyone think we’re successful enough to copy? I should get a pat on the back.”

So if someone copies you, be proud.

Once you’ve congratulated yourself, do a mental checklist to see if any real laws are being broken. You don’t need to call a lawyer (yet) – just check whether your registered trademarks or copyrighted images and text are being used by your so-called competition. You should also look into whether they are guilty of a trade style violation, in other words, when the look and feel of their product is close enough to yours to confuse a consumer.

In the early days of my company, Trainual, we let a competitor go so far as to copy our entire website. They were so shameless and lazy about it, that their copy even used “Trainual” in a number of places. At this point we engaged a lawyer and a simple cancellation letter took care of it. And if you have someone who is clearly copying you, you should probably also contact a lawyer.

2. Is your copycat doing well?

I remember a friend returning from a trip to New York years ago with a bunch of pirated VHS tapes he bought on Canal Street – tapes someone had just recorded from his seat at the movie theater. It was terrible – blurry photos, people walking in front of the camera – the tapes were virtually unwatchable. It wasn’t like I was going to skip a movie at the theater because I’d seen those bootlegs.

The same goes for business: if you have a competitor that is essentially a low-quality bootleg of your company, you don’t have much to worry about. Needless to say, the competitor that copied our entire website is gone – if a copycat tries to sell such a bad imitation, you don’t have to worry about it.

But sometimes there can be cause for concern. What if your copycat is a Good function? Or worse, a better job than you? Now you have some legitimate competition. Think: How are you going to compete against them in the future?

Related: Want to turn tough competition into an advantage? Copy the best features of your competitors.

3. Differentiate yourself with a strategy

Jeff Bezos once said, “If we can keep the competition focused on us while we focus on the customer, things will work out in the end.” This means that if you spend all your time worrying about your copycat competition, your business will become a series of anxious, knee-jerk responses, and you’ll end up building the same products or providing the same services as everyone else. Instead, focus on your customer and what they want. Doing this will set you apart from the people who matter most.

Take Southwest Airlines, for example. When they first started out, they had to find a way to break into a pretty competitive aviation industry. So their goal was to become a low-cost carrier and they looked for customers who wanted to get from one place to another as efficiently as possible.

They did this by making every seat the same on every plane – meaning they didn’t have to allocate seats – and they were able to switch people between flights quite easily. (If you didn’t know, Southwest was the only airline that didn’t have a change fee.) This tactic works for Southwest’s low-cost carrier strategy, and now they have an insanely loyal following.

Other airlines, whose strategies are based on different types of fares and classes of service, couldn’t copy Southwest’s open-seat model, even though they found people liked it more. That’s because their strategy doesn’t allow them to sell every seat as if it were the same, so the “efficient travel” customer will fly Southwest. Instead of focusing on what other airlines did, Southwest focused on what their customers wanted. And it paid off.

Build your strategy around your customers, and copycats will always be one step behind you because they don’t know what you’re going to do next. Eventually, your customers will recognize you as the original, and if your copycats don’t stand out, they won’t be around for long.